Elon Musk and his electric vehicle company Tesla won the dismissal of a federal lawsuit accusing them of defrauding investors by riding on the dogecoin cryptocurrency and conducting insider trading, causing billions of dollars in losses.
The decision was handed down Thursday night by US District Judge Alvin Hellerstein in Manhattan.
Investors accused the world’s richest man of using tweets, a 2021 appearance on NBC’s “Saturday Night Live” and other publicity stunts to profitably trade at their expense through several dogecoin wallets that he or Tesla controlled.
They also said that Musk deliberately inflated the price of dogecoin by more than 36,000% over two years and then let it crash, with him and Tesla often tying the trades to Musk’s public statements and activities related to dogecoin.
Investors said this included when Musk sold dogecoin in April 2023 after replacing Twitter’s blue bird logo with a Shiba Inu dogecoin dog logo, causing the price of dogecoin to rise by 30%.
Hellerstein, however, said Musk’s tweets that dogecoin was Earth’s future currency and could be used to buy Teslas or literally be flown to the moon by his company SpaceX were “aspirational and inflated, not factual and prone to falsification”.
The judge said that meant no reasonable investor could rely on the tweets to pursue a securities fraud claim. He also said it was not possible to understand investor market manipulation and insider trading claims.
Hellerstein dismissed the suit with prejudice, meaning it cannot be brought again.
The investors originally sought $258 billion and have amended their complaint four times in two years.
Lawyers for the investors did not immediately respond to requests for comment.
Musk’s attorney, Alex Spiro, said in an emailed statement: “It’s a very good day for dogecoin.”
In seeking his dismissal, Musk’s lawyers said there was nothing wrong with his “innocuous and often silly tweets”.
They also said there was no evidence that Musk owned two wallets for conducting the suspicious trade, or that he or Tesla ever sold dogecoin.
On “Saturday Night Live,” Musk called dogecoin a “hustle” while playing a fictitious financial expert in a “Weekend Update” segment.
Musk bought Twitter in October 2022 and renamed it X. According to Forbes magazine, it is worth $239.3 billion.
The case is Gorog et al v. Musk et al, US District Court, Southern District of New York, No. 22-05037.
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